United Online Beats Estimates

The ISP sees third-quarter revenue rising.
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United Online

(UNTD)

posted solid second-quarter earnings and guided toward a third-quarter revenue gain.

The Woodland Hills, Calif., Internet service provider said earnings fell to $10.7 million, or 17 cents a share, from the year-ago $12.3 million, or 19 cents a share. So-called adjusted earnings, excluding certain costs, rose to 27 cents from 25 cents a share a year ago and beat the Thomson First Call consensus estimate by a penny.

Revenue rose 19% from a year ago to $131.5 million, beating the Thomson consensus of $129 million. Pay accounts rose by 81,000, subscriptions jumped by 138,000, and active accounts totaled 16.9 million at June 30. United Online shares rose 17 cents to $11.90.

"Our strong second-quarter performance, which resulted in our 16th consecutive quarter of record revenues, was driven by United Online's growing interactive content business, particularly our Classmates social networking service," said CEO Mark R. Goldston. "Q2 marked the first time that 100% of our quarterly revenue growth was generated by non-access businesses -- a testament to our diversification strategy and focused execution. As we continue to manage the growing diversity and evolution of our business, we look forward to a second half of 2005 with the anticipated launch of our VoIP service in the fourth quarter."

The company guided to third-quarter revenue of $132 million, which is above the $129 million Thomson estimate.